The UK market’s packed with great stocks that can provide both robust profits growth and generous passive income over time. Here are three top all-rounders to consider buying .
The FTSE 100 share
Investing in companies whose revenues are government-backed can be dicey business. But while some areas of public expenditure can be prone to savage cuts, defence tends to be more robust, and especially in the current geopolitical climate.
This is what makes BAE Systems (LSE:BA.) a solid selection for capital gains and dividends, in my book. Indeed, shareholder dividends here have risen every year since 2011.
This FTSE 100 company’s more robust than many too. It’s a market leader across a range of technologies, giving it robust relationships with governments across the world. Its order backlog was a record £77.8bn at the end of 2024.
Reduced military expenditure from the US poses a risk going forward. However, this may be offset by soaring defence spending from other NATO members. There’s also the possibility of accelerating sales from other regions like Saudi Arabia and India.
The trust
The JPMorgan Global Growth & Income (LSE:JGGI) investment trust helps investors chase returns using a diversified approach. Spreading risk doesn’t necessarily feed through to lower gains as this financial vehicle shows — it’s delivered an average annual return of 12.8% since 2015.
In terms of dividends, this pooled instrument aims to pay a sum equivalent to at least 4% of the previous year’s total net asset value (NAV).
In total, the trust holds between 50 and 90 different companies from across the globe at any one time. At the moment, these range from the ‘Magificent Seven’ tech stocks such as Nvidia and Microsoft, to luxury goods group LVMH, defence business Safran, and food and drink producer Nestlé.
This in turn helps it absorb shocks in particular industries and geographies, and the ability to provide a smooth return across the economic cycle.
Investors need to consider JPMorgan trust’s use of borrowed funds however. As it mentions on its factsheet: “Gearing may magnify gains or losses” depending on market movements.
The FTSE 250 stock
Supported by the cash cow that is the Harry Potter franchise, Bloomsbury Publishing (LSE:BMY) has one of the FTSE 250‘s greatest dividend records.
Up until the Covid-19 crisis, cash rewards had risen for 24 consecutive years. Since then, dividends have resumed with a bang, and in the year to February 2024 it raised the payout 25%. Another hefty hike is tipped for financial 2025 when results are released on Thursday (22 May).
Bloomsbury doesn’t just rely on the student wizard to drive profits either. It has a packed stable of fantasy fiction winners from popular authors including Sarah J Maas. And it’s making huge strides in the academic publishing field to supplement its heavyweight consumer division.
There’s no guarantee the company can keep delivering bestsellers, of course. Bad reviews and significant competition are just a couple of threats it faces. But I feel it may have the strength in depth to overcome future disappointments and still deliver great returns.
